- Lufthansa is among airlines considering replacing business-class seats with more ‘premium economy.’
- Premium economy is far more profitable for airlines than business class, airlines told Bloomberg.
- Some airlines are considering scrapping business class entirely, Lufthansa told Bloomberg.
- See more stories on Insider’s business page.
More and more airlines are considering replacing at least some of their business-class seats with “premium-economy” sections, according to a report by Bloomberg.
A division of German airline Lufthansa told the publication it had even received enquiries from other airlines who wanted to scrap business class entirely.
Premium economy, one notch below business class, is generally an upgrade from regular economy, with slightly wider seats and more legroom, and sometimes better food and bigger TVs. Seats typically take up nearly two-thirds less room than business-class berths and are up to 10 times cheaper to install, which makes them very attractive to airlines, per Bloomberg’s report.
Premium-economy seats are around 40% more profitable per square foot of a plane’s cabin space than business class, Lufthansa told Bloomberg. The airline has premium-economy cabins on each of its 102 long-haul aircraft, and is considering replacing some business-class seats with more premium-economy ones, it told Bloomberg.
Lufthansa Technik, the airline’s division that focuses on cabin maintenance and repair, told Bloomberg that it has received enquiries from other airlines considering shrinking business class so that they could add premium-economy sections. Some Asian airlines are even considering scrapping business class completely, the company told Bloomberg, without naming the airlines.
Emirates unveiled its first planes with premium economy earlier this year, complete with leg and foot rests, while Finnair is adding the section to all 27 of its widebody planes, it told Bloomberg. Carriers including Singapore Airlines and British Airways introduced premium-economy sections before the pandemic.
“The investment has been an easy decision for us,” Finnair CEO Topi Manner told the publication. “Premium economy is the most profitable real estate on the aircraft, and the pandemic is reinforcing that.”
Lufthansa told the publication that it was initially worried that business-class customers would downgrade to cheaper seats in premium economy, but that actually, most premium-economy customers are people who upgrade from economy instead.